As of January 2016, unemployment is 4.9% UE3 and 5.6% UE4 (UE4 includes people who CAN take a job if you give it to them, WANT to take a job, but believe there is no job, so have given up). This seems to have improved since.
You're conflating labor force participation rate with unemployment. We are in a long-standing labor force bubble, and have not yet recovered to the pre-1960s stable level of 58%-60%. Other countries are better off, with lower rates of labor participation, allowing more leisure time and home life among the population.
The labor force participation rate argument assumes that every able-bodied man and woman must have a job, whether they need the income or not. Rather than staying home to raise a child, you would pay someone else to raise your child. This increases expenses; it does, however, concentrate child-raising (4 people raising 40 kids, rather than 40 mothers raising 20 kids), and allow for more production, thus total wealth.
You are basically being judgmental against people who chose to have single-income households rather than work. Families with $100,000/year incomes from a single earner, with one or two children, living in relatively-high luxury have no need for a second income; your assertion that the labor force participation rate is not fully-employed is an assertion that these people are lazy, irresponsible assholes and should get to work instead of staying home to tend house and maintain community social connections.
Let's deconstruct more of your deception.
The US has a population of 319 million, and only 151 million are employed
The United States has 319 million INCLUDING RETIREES AND MINORS. It has a civilian non-institutional population of 254 million, and a labor force of 159 million.
That's less than half the work force
The United States has a labor force of 159 million, 62.8% of its non-institutional population--more than half. It has 152 million employed in that labor force, or 95.1%.
Again: you demand every man and woman capable of doing anything go out and get a job. Wage slavery under a communist regime is the order of the day, I see.
The point of charity is that we have 4.9% unemployment (5.6% UE4), and the people at the bottom can either pay $40 for a cooking pot or get one for $1 at Good Will. It's always going to be that way. Charity isn't support for a collapsing economy.
I mean, Facebook could just use a PRNG to randomly-select function names and Javascript paths./js/* goes through URL redirection that checks your session and says, "Oh, that's the JavaScript for ads", and then inserts a randomized JS file. The JS is encoded, the encoding functions are renamed and altered to perform the same action on different patterns with different variable and function names, and the encoding is altered (XOR) with a random value so it prints differently in every instance. Without heuristics debugging, you can't catch it; and you can't even do it that way without catching a lot of false-positives.
Any attempt to detect and block this would just fail or break Facebook. Even the divs could have their class randomized, and have JavaScript set additional attributes with randomized names.
That's okay. I taught your daughter to ferment beer and adjust the Android location settings to spoof locations. She just meets up at her friend's place and then locks the location and goes out to meet boys whose parents are away for the week.
I excluded my parents when I was 10. When I was 12, I built a computer so as to separate my point-of-contact from them so I could better-conceal my activities. My parents didn't raise me; I raised myself, and took action to avoid interacting with them so much. Routine. Don't raise any concern, and the oblique talks and arguments and car rides are all just motions, and not communication.
My point is that you can't go lower than where the costs are higher than the price; yet you can reach a scenario where the price people are willing and able to pay is higher than the cost.
New technology is always an example.
It's pretty cheap RIGHT NOW to make a ginormous OLED panel. Every cell phone has an AMOLED display because it costs roughly the same to fab a big sheet of that as it does to fab an LCD; there are defects, and they simply cut out cell-phone-sized rectangles excluding the defect areas. Of course AMOLED cell phones sell for the same as LCD cell phones did prior.
By contrast, you need to perform a faulty, much-more-expensive (extremely labor-intensive) process to make a 65 inch AMOLED with 4K resolution; so a 3.5 inch AMOLED costs the same as a 3.5 inch LCD, but a 65 inch AMOLED costs $5,000 while a 65 inch LCD costs $700. They can't price the 65 inch AMOLED displays at $1,500 or $1,100 or $700, because they'd lose thousands of dollars on every display.
Do you imagine that, when AMOLED costs $700 and LCD costs $200, the LCD panel will sell for $700? It'll sell for under the AMOLED price. It has to compete with AMOLED, so if people are willing to pay $700 for AMOLED and they see a great advantage over LCD, maybe they won't pay $500 for LCD; maybe they'll tip in the extra $200. Maybe if you sell that LCD for $350, people will start to feel uncomfortable about paying twice as much for the same TV with a fancy-type display, and will buy LCD.
It's not as simple as you say. Direct competition drives prices down to a minimum; indirect competition drives prices down to what's left after all more-desired goods are bought. Those "more-desired" goods may be collections--your fancy $500 thing might be favorable over that $200 thing or that $300 thing, but I could spend that $500 on TWO fairly-desirable things, which together are better than the one very-desirable thing.
And maybe $0.10/pill OTC Modafinil, but I'm biased (yes, I've looked at the toxicology, the low abuse potential, and so forth, and determined Modafinil should be OTC because it's as safe or safer than something like Loratadine, Naproxen, or the like--notably safer than Benadryl, Tylenol, and Robatussum; but I have a vested interest in Modafinil because holy-living-fuck does it fix ADHD, and it doesn't make me feel like a god damned superhero like amphetamine-like drugs do!).
Really, though, a working economy is a start. Ours has decayed a bit. It's way better than any prior period, but also less-efficient, and thus less-effective at using the great wealth of America to provide for a stronger and more-stable America.
No, that's wrong. If your house burns down and you didn't have fire protection, your insurer won't pay shit, or else they'll ask you to confirm fire protection and proximity to a station and then jack up your rates based on how much fire protection response you have. My homeowner's insurance quote would be $350/year higher if I wasn't within 5 miles of a fire station.
Insurance requires you to mitigate some level of risk yourself. You handle the first $50,000 worth of shit that can happen; we'll handle the rest. You put controls in place to make these events less-likely and less-costly; we'll use that probability to compute risk and take on what remains. If you leave yourself open with no risk controls, they either charge you a lot, or they determine they have NO IDEA how much they need to charge you and just deny coverage.
Yes and those arguments are best held in reserve. My Universal Social Security *barely* fills the gap, and people argue that I'm riding the edge more toward failure than success; I never pull out charity to polish it off because charity is a big unknown, and just a nice side bonus.
92% of prostitutes said they'd get out of it if they thought they had enough money to live. They wouldn't; I'm 100% certain they're honest and got into it because of that, and giving the next generation enough money to live means 92% of would-be prostitutes won't be prostitutes.
The ability to hold your life together means you don't need gangs for support, drug deals for money, and shoplifting or armed robbery to afford food.
I avoid these arguments because saving a trillion fucking dollars of tax liability is already a god damn crazy Utopian dream, and writing out all the secondary effects will make people balk.
A properly-implemented UBI plan, such as Universal Social Security, would prevent an unemployment crisis as we move through the coming bolt of technical progress. In the end, we'd end up flinching from the pain a little; but we'd go no higher than ~10% unemployment, if that, rather than hitting 80% and experiencing another Industrial Revolution. The poor, rich, and middle-class would all move into a golden age of increased wealth and prosperity, and the next generation would forget all about that and again complain about how they're so poor and the 1% have taken all their shit and whatever, while driving their high-powered Teslas and living in 3,200sqft condos and operating their 3D VR hologames on the 15 minute hyperloop ride across the country to work and wishing they were rich.
If bringing the jobs home means the goods cost more, then we'll buy fewer things. A lot of distributors and retailers and shippers will lose their jobs, and a smaller number of Americans will become factory workers. That's a net loss of employed Americans.
I estimated a complete blockade of China would increase American unemployment by between 15,000,000 and 40,000,000 jobs, raising the unemployment rate to between 14.3% and 29.0%. Economists are projecting Trump's policies to bring SOME manufacturing jobs back to America will increase American unemployment by about 3,800,000, raising unemployment to 7.8%.
$594 is about where my current number sits, and was reached by jiggering with expenses. I can get food expenses down to $25/month, and initially started with a $100/month food budget; I since rolled food, clothing, and personal care into a combined budget for the model, which was $170 in 2013, and $181 in 2015.
My model operates on a 244sqft single-occupancy apartment plan, with cost-of-risk reduced by stabilizing income. At low incomes, you're more likely to lose your ability to pay rent, thus more evictions and more empty units. The cost of evictions and empty units is distributed through the base rent cost; eventually, for a certain low income, the cost of rent required for the landlord to stay in business is higher than the tenant can afford. Lowering those risks lowers the minimum rent a landlord can charge while still turning a profit.
I don't believe a basic income would be inflationary. It might move spending around; but it would more likely create a labor crisis (118% employment? We don't have enough people!) resolved by rapid population expansion *or* cutting full-time working hours back to 32/week (this decreases productivity per person, making everyone at max 20% poorer; because of the amount of part-time work and underutilized labor--office workers don't do much on Monday or Friday--the impact would be less).
People try to find ways to not pay taxes anyway. I like to assume that's already accounted for because everyone's dodging all taxes they can, and just work from reported income as the measure of income.
Lowering the income tax would invite people to tax shelter here, which lets us tax more out of them, maybe. My plan has a hard-limit of bounding top-tier personal taxes to no higher than 40% (it's 39.6% now), and causes a 4.5% marginal reduction in business income taxes, as well as a reduction in payroll taxes.
SS and Medic* combined are over $1.9 T - there's just no way to replace them with basic income and still pay everyone else too.
Uh, actually, I worked out how to do just that in particular. I use a 20-year amortization because the Social Security Administration won't give you full benefits unless you retire after age 67, and projects an average life expectancy of 87.
You should note the numbers I use are conservative--i.e. faulty. I control the impact of Universal Social Security for all retirees who enter retirement age in the first 15 years of the program, grandfathering these until they die. The actual buying power of the USS benefit *increases* over time--for example, the benefit has a purchasing power 0.7% higher in 2014 than in 2013--because it doesn't factor out productivity gains. If productivity is 10% higher, then the gross distribution has 10% more buying power. Productivity gains are called "technical progress" by economists, and essentially are just new technology which produces more with less labor--the same hours worked spits out more stuff, thus the total pile of money buys more stuff--and so are a constant until such time as a fatal economic collapse ends our ability to function as a country anyway.
That means the actual USS benefit is ~11% higher 15 years in. 50 years in (retirement age for someone who turns 18 at inception), it's 41% higher--that's more than someone who worked full-time minimum wage for their whole life would receive today from OASDI. People making more than minimum wage have a capacity to save their own money to supplement this.
In 15 years, you're looking at the equivalent of $645/month today, plus up to 15 years of savings--over $1,100/month on a 20-year amortization if you *only* put the USS benefit away as savings with NO GROWTH (not even 1% fixed-income growth). If you weren't able to save, you'd be receiving less in Social Security old-age pensions anyway.
Again: that still covers 100% of current OASDI benefits for 100% of all current retirees and retirees who reach retirement age within the next 15 years, grandfathering them until they die.
Spending creates jobs. The trickle-down theory pundits assumes rich people do all the spending; economists have noticed that higher-income individuals actually save a larger proportion of their income, so the broad consumer base has a bigger impact.
It doesn't change *who* is doing the spending, though; it changes *how* the spending is happening. Right now, we have an ineffective public aid system that costs $1.7 trillion; we can make an effective one which cuts the taxes taken by $1 trillion, excluding displacement (i.e. some people who don't have money are getting money; we don't count that as "reduced taxes", as that money is taxes taken from someone else).
That's more efficient. Essentially, when $100 of wages go into making a good, that good can't sell for less than $100. At the same time, if the employer pays $100 of wages and you receive $63, there's a loss of $37 there somewhere. In this system, the employer might still pay $100, but ~$87 gets to your hands--NOTHING gets any more expensive, but suddenly the consumer has more spending money.
Additional consumption requires additional production. As you observe, there is no increase in productivity from this; you get an increase in demand and, with no new technology to produce more with fewer workers, you have to hire more workers.
The poverty line is sort of a red herring. It's a benchmark based on CPI inflation in our current economic system.
Let's talk about housing.
Imagine you could rent a 244sqft single-occupancy apartment for $300/month. Not big, not fancy, but it's something, right? It's cheap. They put pocket doors on the bathroom and bedroom, so you don't have to swing the door through this small-ish space. It's a place to live, it's got a kitchen, it's well-insulated so utilities are cheap, it's out of the rain, what's not to like?
This isn't feasible today.
Your income is less-stable the lower it is. You have a reduced capability to save; low-wage jobs are often hourly, and frequently cut hours; part-time jobs can become unemployment; and unemployment benefits run out in 6 months. Evictions are expensive (3 months of tenant protection, legal work, moving crew to throw all your shit out); empty units carry a huge cost; and these things happen more frequently when your income isn't stable.
This is called "risk". It's a technical term; it means approximately the same thing as the lay-term, but has its own entire set of complex domain knowledge.
The cost of non-payment, evictions, and empty units is called the "cost of risk". To cover this, we have to divide that by the average time we believe each unit will stay filled, and distribute these costs among them. In other words: the lower the income of our target market, the more we have to charge them per square foot of living space.
At a point, the minimum price for which a landlord can rent an apartment is higher than what the tenant can pay.
A Universal Social Security gives the tenant an irrevocable income. This income is absolutely-known; it can't be garnered (fines, alimony, tax liability) and it can't be disqualified. That sharply reduces the risk to landlords, reducing the cost of risk. We can further reduce risks by enabling a partnership by which the tenant and landlord have Social Security direct-deposit the rent into the Landlord's account; if either party cancels this partnership, the Social Security Administration notifies the other party immediately.
My models showed a median of somewhere between $1.06 and $1 per square foot in low-income areas, including areas in Baltimore, in New York, in Washington State, and in California. I used that to project the 244sqft area, as this plus 30% comes to $300. That leaves room for error, and also for further risk controls such as a landlord charging an extra 10% for the first several months as a security deposit, forcing the tenant to buy into his own risk. Long-term, that means your rent drops lower, and you get your security deposit back when you move. The long-term feasible price is going to account for less cost-of-risk if tenants on average can supply the full security deposit up-front (eliminates the gap in risk buffering) or pay a higher rent to build that security deposit faster--meaning a landlord requiring an extra $50/mo for the first 10 months as security deposit can charge a lower base rent than a landlord requiring an extra $25/mo for 20 months.
That means it's feasible to live on substantially less than the Federal poverty line (about half). It's in no way pleasant; it is, however, better than living in a soggy cardboard box fishing for bits of food in people's trash.
I've run the numbers, including impacts on HUD-qualified households, on low-income households, on high-income households, on families, on single individuals, on single parents, and even on retirement. I even included a public aid system targeting children and naturalized Americans in low-income households, avoiding the known-unknown risk of handing out straight cash for welfare babies and gold-digging immigrants.
It's a trillion dollars cheaper than our current model, and completely remediates all defects in our current public aid system. It eliminates the HUD lottery; it gets food to the 50 million Americans who don't get to eat every day; it pushes everyone down to the bottom 5% above the Federal poverty line, and it creates stability in the lowest-possible-income individuals so as to support market solutions supplying food, shelter, and other basic needs.
There is no American who ends up worse off under this Universal Social Security plan. Not one. By extension, there is not one human being in the *world* who ends up worse off.
The total tax burden on the American tax payer, in a 2013 model, is $1,023 lower than the current public aid system, excluding displaced income (i.e. money taken from you and given to someone else is counted as tax burden).
Enough jobs exist to satisfy consumer demand. We can't produce more jobs than we have. The millions of Help Wanted signs are out there because 40% of Americans leave their current employment every year; some become unemployed, most change jobs, and any who become unemployed are replaced out of the unemployment pool. The stable state right now is about 5% unemployment, because we can't afford to pay the wages for the rest of the job-seekers.
If you don't believe me, set up a lemonade stand in your living room and try to make $75,000/year just selling lemonade to your kid and dog.
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As of January 2016, unemployment is 4.9% UE3 and 5.6% UE4 (UE4 includes people who CAN take a job if you give it to them, WANT to take a job, but believe there is no job, so have given up). This seems to have improved since.
You're conflating labor force participation rate with unemployment. We are in a long-standing labor force bubble, and have not yet recovered to the pre-1960s stable level of 58%-60%. Other countries are better off, with lower rates of labor participation, allowing more leisure time and home life among the population.
The labor force participation rate argument assumes that every able-bodied man and woman must have a job, whether they need the income or not. Rather than staying home to raise a child, you would pay someone else to raise your child. This increases expenses; it does, however, concentrate child-raising (4 people raising 40 kids, rather than 40 mothers raising 20 kids), and allow for more production, thus total wealth.
You are basically being judgmental against people who chose to have single-income households rather than work. Families with $100,000/year incomes from a single earner, with one or two children, living in relatively-high luxury have no need for a second income; your assertion that the labor force participation rate is not fully-employed is an assertion that these people are lazy, irresponsible assholes and should get to work instead of staying home to tend house and maintain community social connections.
Let's deconstruct more of your deception.
The US has a population of 319 million, and only 151 million are employed
The United States has 319 million INCLUDING RETIREES AND MINORS. It has a civilian non-institutional population of 254 million, and a labor force of 159 million.
That's less than half the work force
The United States has a labor force of 159 million, 62.8% of its non-institutional population--more than half. It has 152 million employed in that labor force, or 95.1%.
Again: you demand every man and woman capable of doing anything go out and get a job. Wage slavery under a communist regime is the order of the day, I see.
The point of charity is that we have 4.9% unemployment (5.6% UE4), and the people at the bottom can either pay $40 for a cooking pot or get one for $1 at Good Will. It's always going to be that way. Charity isn't support for a collapsing economy.
I mean, Facebook could just use a PRNG to randomly-select function names and Javascript paths. /js/* goes through URL redirection that checks your session and says, "Oh, that's the JavaScript for ads", and then inserts a randomized JS file. The JS is encoded, the encoding functions are renamed and altered to perform the same action on different patterns with different variable and function names, and the encoding is altered (XOR) with a random value so it prints differently in every instance. Without heuristics debugging, you can't catch it; and you can't even do it that way without catching a lot of false-positives.
Any attempt to detect and block this would just fail or break Facebook. Even the divs could have their class randomized, and have JavaScript set additional attributes with randomized names.
It's 15 minutes on an hour, 7.5 minutes on a half.
That's okay. I taught your daughter to ferment beer and adjust the Android location settings to spoof locations. She just meets up at her friend's place and then locks the location and goes out to meet boys whose parents are away for the week.
A victory for personal liberty everywhere.
I excluded my parents when I was 10. When I was 12, I built a computer so as to separate my point-of-contact from them so I could better-conceal my activities. My parents didn't raise me; I raised myself, and took action to avoid interacting with them so much. Routine. Don't raise any concern, and the oblique talks and arguments and car rides are all just motions, and not communication.
My point is that you can't go lower than where the costs are higher than the price; yet you can reach a scenario where the price people are willing and able to pay is higher than the cost.
New technology is always an example.
It's pretty cheap RIGHT NOW to make a ginormous OLED panel. Every cell phone has an AMOLED display because it costs roughly the same to fab a big sheet of that as it does to fab an LCD; there are defects, and they simply cut out cell-phone-sized rectangles excluding the defect areas. Of course AMOLED cell phones sell for the same as LCD cell phones did prior.
By contrast, you need to perform a faulty, much-more-expensive (extremely labor-intensive) process to make a 65 inch AMOLED with 4K resolution; so a 3.5 inch AMOLED costs the same as a 3.5 inch LCD, but a 65 inch AMOLED costs $5,000 while a 65 inch LCD costs $700. They can't price the 65 inch AMOLED displays at $1,500 or $1,100 or $700, because they'd lose thousands of dollars on every display.
Do you imagine that, when AMOLED costs $700 and LCD costs $200, the LCD panel will sell for $700? It'll sell for under the AMOLED price. It has to compete with AMOLED, so if people are willing to pay $700 for AMOLED and they see a great advantage over LCD, maybe they won't pay $500 for LCD; maybe they'll tip in the extra $200. Maybe if you sell that LCD for $350, people will start to feel uncomfortable about paying twice as much for the same TV with a fancy-type display, and will buy LCD.
It's not as simple as you say. Direct competition drives prices down to a minimum; indirect competition drives prices down to what's left after all more-desired goods are bought. Those "more-desired" goods may be collections--your fancy $500 thing might be favorable over that $200 thing or that $300 thing, but I could spend that $500 on TWO fairly-desirable things, which together are better than the one very-desirable thing.
Yeah screw that; I am way too much of a sociopath to deal with people. I'd rather just fix the economy so shit like that never happens again.
Uh I eliminated $1 trillion of Welfare spending in my model, and I didn't go anywhere near medicaid or treatment programs.
And maybe $0.10/pill OTC Modafinil, but I'm biased (yes, I've looked at the toxicology, the low abuse potential, and so forth, and determined Modafinil should be OTC because it's as safe or safer than something like Loratadine, Naproxen, or the like--notably safer than Benadryl, Tylenol, and Robatussum; but I have a vested interest in Modafinil because holy-living-fuck does it fix ADHD, and it doesn't make me feel like a god damned superhero like amphetamine-like drugs do!).
Really, though, a working economy is a start. Ours has decayed a bit. It's way better than any prior period, but also less-efficient, and thus less-effective at using the great wealth of America to provide for a stronger and more-stable America.
No, that's wrong. If your house burns down and you didn't have fire protection, your insurer won't pay shit, or else they'll ask you to confirm fire protection and proximity to a station and then jack up your rates based on how much fire protection response you have. My homeowner's insurance quote would be $350/year higher if I wasn't within 5 miles of a fire station.
Insurance requires you to mitigate some level of risk yourself. You handle the first $50,000 worth of shit that can happen; we'll handle the rest. You put controls in place to make these events less-likely and less-costly; we'll use that probability to compute risk and take on what remains. If you leave yourself open with no risk controls, they either charge you a lot, or they determine they have NO IDEA how much they need to charge you and just deny coverage.
Yes and those arguments are best held in reserve. My Universal Social Security *barely* fills the gap, and people argue that I'm riding the edge more toward failure than success; I never pull out charity to polish it off because charity is a big unknown, and just a nice side bonus.
92% of prostitutes said they'd get out of it if they thought they had enough money to live. They wouldn't; I'm 100% certain they're honest and got into it because of that, and giving the next generation enough money to live means 92% of would-be prostitutes won't be prostitutes.
The ability to hold your life together means you don't need gangs for support, drug deals for money, and shoplifting or armed robbery to afford food.
I avoid these arguments because saving a trillion fucking dollars of tax liability is already a god damn crazy Utopian dream, and writing out all the secondary effects will make people balk.
A properly-implemented UBI plan, such as Universal Social Security, would prevent an unemployment crisis as we move through the coming bolt of technical progress. In the end, we'd end up flinching from the pain a little; but we'd go no higher than ~10% unemployment, if that, rather than hitting 80% and experiencing another Industrial Revolution. The poor, rich, and middle-class would all move into a golden age of increased wealth and prosperity, and the next generation would forget all about that and again complain about how they're so poor and the 1% have taken all their shit and whatever, while driving their high-powered Teslas and living in 3,200sqft condos and operating their 3D VR hologames on the 15 minute hyperloop ride across the country to work and wishing they were rich.
If bringing the jobs home means the goods cost more, then we'll buy fewer things. A lot of distributors and retailers and shippers will lose their jobs, and a smaller number of Americans will become factory workers. That's a net loss of employed Americans.
I estimated a complete blockade of China would increase American unemployment by between 15,000,000 and 40,000,000 jobs, raising the unemployment rate to between 14.3% and 29.0%. Economists are projecting Trump's policies to bring SOME manufacturing jobs back to America will increase American unemployment by about 3,800,000, raising unemployment to 7.8%.
Road wear is almost 100% weather.
$594 is about where my current number sits, and was reached by jiggering with expenses. I can get food expenses down to $25/month, and initially started with a $100/month food budget; I since rolled food, clothing, and personal care into a combined budget for the model, which was $170 in 2013, and $181 in 2015.
My model operates on a 244sqft single-occupancy apartment plan, with cost-of-risk reduced by stabilizing income. At low incomes, you're more likely to lose your ability to pay rent, thus more evictions and more empty units. The cost of evictions and empty units is distributed through the base rent cost; eventually, for a certain low income, the cost of rent required for the landlord to stay in business is higher than the tenant can afford. Lowering those risks lowers the minimum rent a landlord can charge while still turning a profit.
I don't believe a basic income would be inflationary. It might move spending around; but it would more likely create a labor crisis (118% employment? We don't have enough people!) resolved by rapid population expansion *or* cutting full-time working hours back to 32/week (this decreases productivity per person, making everyone at max 20% poorer; because of the amount of part-time work and underutilized labor--office workers don't do much on Monday or Friday--the impact would be less).
People try to find ways to not pay taxes anyway. I like to assume that's already accounted for because everyone's dodging all taxes they can, and just work from reported income as the measure of income.
Lowering the income tax would invite people to tax shelter here, which lets us tax more out of them, maybe. My plan has a hard-limit of bounding top-tier personal taxes to no higher than 40% (it's 39.6% now), and causes a 4.5% marginal reduction in business income taxes, as well as a reduction in payroll taxes.
In other words: Taxes go down.
SS and Medic* combined are over $1.9 T - there's just no way to replace them with basic income and still pay everyone else too.
Uh, actually, I worked out how to do just that in particular. I use a 20-year amortization because the Social Security Administration won't give you full benefits unless you retire after age 67, and projects an average life expectancy of 87.
You should note the numbers I use are conservative--i.e. faulty. I control the impact of Universal Social Security for all retirees who enter retirement age in the first 15 years of the program, grandfathering these until they die. The actual buying power of the USS benefit *increases* over time--for example, the benefit has a purchasing power 0.7% higher in 2014 than in 2013--because it doesn't factor out productivity gains. If productivity is 10% higher, then the gross distribution has 10% more buying power. Productivity gains are called "technical progress" by economists, and essentially are just new technology which produces more with less labor--the same hours worked spits out more stuff, thus the total pile of money buys more stuff--and so are a constant until such time as a fatal economic collapse ends our ability to function as a country anyway.
That means the actual USS benefit is ~11% higher 15 years in. 50 years in (retirement age for someone who turns 18 at inception), it's 41% higher--that's more than someone who worked full-time minimum wage for their whole life would receive today from OASDI. People making more than minimum wage have a capacity to save their own money to supplement this.
In 15 years, you're looking at the equivalent of $645/month today, plus up to 15 years of savings--over $1,100/month on a 20-year amortization if you *only* put the USS benefit away as savings with NO GROWTH (not even 1% fixed-income growth). If you weren't able to save, you'd be receiving less in Social Security old-age pensions anyway.
Again: that still covers 100% of current OASDI benefits for 100% of all current retirees and retirees who reach retirement age within the next 15 years, grandfathering them until they die.
Spending creates jobs. The trickle-down theory pundits assumes rich people do all the spending; economists have noticed that higher-income individuals actually save a larger proportion of their income, so the broad consumer base has a bigger impact.
It doesn't change *who* is doing the spending, though; it changes *how* the spending is happening. Right now, we have an ineffective public aid system that costs $1.7 trillion; we can make an effective one which cuts the taxes taken by $1 trillion, excluding displacement (i.e. some people who don't have money are getting money; we don't count that as "reduced taxes", as that money is taxes taken from someone else).
That's more efficient. Essentially, when $100 of wages go into making a good, that good can't sell for less than $100. At the same time, if the employer pays $100 of wages and you receive $63, there's a loss of $37 there somewhere. In this system, the employer might still pay $100, but ~$87 gets to your hands--NOTHING gets any more expensive, but suddenly the consumer has more spending money.
Additional consumption requires additional production. As you observe, there is no increase in productivity from this; you get an increase in demand and, with no new technology to produce more with fewer workers, you have to hire more workers.
The poverty line is sort of a red herring. It's a benchmark based on CPI inflation in our current economic system.
Let's talk about housing.
Imagine you could rent a 244sqft single-occupancy apartment for $300/month. Not big, not fancy, but it's something, right? It's cheap. They put pocket doors on the bathroom and bedroom, so you don't have to swing the door through this small-ish space. It's a place to live, it's got a kitchen, it's well-insulated so utilities are cheap, it's out of the rain, what's not to like?
This isn't feasible today.
Your income is less-stable the lower it is. You have a reduced capability to save; low-wage jobs are often hourly, and frequently cut hours; part-time jobs can become unemployment; and unemployment benefits run out in 6 months. Evictions are expensive (3 months of tenant protection, legal work, moving crew to throw all your shit out); empty units carry a huge cost; and these things happen more frequently when your income isn't stable.
This is called "risk". It's a technical term; it means approximately the same thing as the lay-term, but has its own entire set of complex domain knowledge.
The cost of non-payment, evictions, and empty units is called the "cost of risk". To cover this, we have to divide that by the average time we believe each unit will stay filled, and distribute these costs among them. In other words: the lower the income of our target market, the more we have to charge them per square foot of living space.
At a point, the minimum price for which a landlord can rent an apartment is higher than what the tenant can pay.
A Universal Social Security gives the tenant an irrevocable income. This income is absolutely-known; it can't be garnered (fines, alimony, tax liability) and it can't be disqualified. That sharply reduces the risk to landlords, reducing the cost of risk. We can further reduce risks by enabling a partnership by which the tenant and landlord have Social Security direct-deposit the rent into the Landlord's account; if either party cancels this partnership, the Social Security Administration notifies the other party immediately.
My models showed a median of somewhere between $1.06 and $1 per square foot in low-income areas, including areas in Baltimore, in New York, in Washington State, and in California. I used that to project the 244sqft area, as this plus 30% comes to $300. That leaves room for error, and also for further risk controls such as a landlord charging an extra 10% for the first several months as a security deposit, forcing the tenant to buy into his own risk. Long-term, that means your rent drops lower, and you get your security deposit back when you move. The long-term feasible price is going to account for less cost-of-risk if tenants on average can supply the full security deposit up-front (eliminates the gap in risk buffering) or pay a higher rent to build that security deposit faster--meaning a landlord requiring an extra $50/mo for the first 10 months as security deposit can charge a lower base rent than a landlord requiring an extra $25/mo for 20 months.
That means it's feasible to live on substantially less than the Federal poverty line (about half). It's in no way pleasant; it is, however, better than living in a soggy cardboard box fishing for bits of food in people's trash.
I've run the numbers, including impacts on HUD-qualified households, on low-income households, on high-income households, on families, on single individuals, on single parents, and even on retirement. I even included a public aid system targeting children and naturalized Americans in low-income households, avoiding the known-unknown risk of handing out straight cash for welfare babies and gold-digging immigrants.
It's a trillion dollars cheaper than our current model, and completely remediates all defects in our current public aid system. It eliminates the HUD lottery; it gets food to the 50 million Americans who don't get to eat every day; it pushes everyone down to the bottom 5% above the Federal poverty line, and it creates stability in the lowest-possible-income individuals so as to support market solutions supplying food, shelter, and other basic needs.
There is no American who ends up worse off under this Universal Social Security plan. Not one. By extension, there is not one human being in the *world* who ends up worse off.
It's one trillion dollars cheaper.
The total tax burden on the American tax payer, in a 2013 model, is $1,023 lower than the current public aid system, excluding displaced income (i.e. money taken from you and given to someone else is counted as tax burden).
You're talking about trickle-down economics.
Enough jobs exist to satisfy consumer demand. We can't produce more jobs than we have. The millions of Help Wanted signs are out there because 40% of Americans leave their current employment every year; some become unemployed, most change jobs, and any who become unemployed are replaced out of the unemployment pool. The stable state right now is about 5% unemployment, because we can't afford to pay the wages for the rest of the job-seekers.
If you don't believe me, set up a lemonade stand in your living room and try to make $75,000/year just selling lemonade to your kid and dog.
It'd actually be a trillion dollars less tax liability on the American taxpayer, so even the rich could get richer from a universal social security.